According to Cryptoquant's Coinbase Bitcoin Premium Index, the platform's BTC price has been below the global average for 14 consecutive days, with the latest reading at -0.0825%. This means that US traders are selling at below-market prices rather than buying.
A positive premium (>0) indicates that the Coinbase price is higher than the global average price, which usually means: strong buying in the US market, active entry of institutional or compliant funds, ample dollar liquidity, and optimistic investment sentiment.
A negative premium (<0) indicates that the Coinbase price is lower than the global average price, which usually reflects: greater selling pressure in the US market, decreased investor risk appetite, increased market risk aversion, or capital outflow.
Tax loss harvesting and increased pressure from ETF outflows
Most analysts attribute the prolonged negative premium to four factors:
First, institutional funds are withdrawing through ETFs, creating concentrated sell orders in the short term.
Secondly, the common year-end "tax loss harvesting" drives investors to realize losses in order to offset taxable income.
Third, the concentrated expiration of December options will exert additional selling pressure on prices.
Fourth, while Asian buying remains robust, it is insufficient to immediately absorb the sell orders from the US.
buy the dips indicator?
One argument in the market is that when the Coinbase Bitcoin premium is negative, it's a good time to buy the dips. Historically, negative premiums have sometimes been an indicator of trend reversal during bull markets, but this isn't always accurate and there's a certain time lag.
For example, as shown in the chart below, after Bitcoin's negative premium approached 0.2% at the beginning of the year, the price of BTC still fell twice more, but overall it did rebound after a period of time. For spot traders, this may be an indicator worth paying attention to in the long term.
